As previously announced, the Poulina group has taken over Agromed Company from the U.S. fund ECP and Lotfi Abdennadher group. This takeover follows the serious financial difficulties of the company whose debt to banks, tax authorities and the social security fund had exceeded 50 MTD, resulting in social and economic difficulties for its major suppliers, its employees and small milk producers. The latter had even come a few months ago outside the headquarters of some governorates of regions, where the company was, to protest, by pouring quantities of milk that had been rejected by Agromed which no longer afford to pay suppliers.
It must be said that the entire milk sector in Tunisia, with the exception of Délice, is suffering. And while some companies like Stil, Beldi or Yoplait have already disappeared, others are still sick. The causes are multiple, starting with the price of milk, the number of operators, the irregularity of the dairying and the inability so far to export milk which is considered a basic and strategic product.
The takeover of Agromed by Poulina was not built on a single deal between the two companies, but in a more legal process of transferring ownership of the ECP and the Abdennadher group and Poulina Holding after a settlement agreement between creditors and Agromed Company which was crippled by debt.
As announced since last October, the majority shareholder ECP (over 52%) had expressed its willingness to sell, and a data room was open to potential buyers. Three interesting bids were received, after that of Délice Danone had been refused; Hamdi Meddeb’s company already dominates the market of milk and dairy products in Tunisia. There was indeed an offer from a Libyan operator (Mohamed Achouri) for 15 MTD, but who specifically requested permission to export 100 thousand liters of milk per day on Libya. There were also offers from … Tunisia Milk proposing 7 MTD for Agromed assets. And finally there was the Poulina group’s offer which proposed a little more than 22 MTD of assets and liabilities of the company with a business plan to reorganize the company, while preserving both the social gains and the economic tool of the company. According to our sources, assets would have been estimated between 1 and 1.5 MTD. After many meetings, the most official offer was that of Abdelwahab Ben Ayed’s group, a financially sound group and already producer of dairy products, which was accepted by everyone: ECP, banks, tax authorities, NSSF, in particular. In the process, all agreed to make reductions of debts they owed to Agromed. Liabilities, debts to the tax authorities, CNSS, banks, major suppliers and farmers, have been reduced to just over 20 MTD with a rescheduling plan that will be met with the new owner. The latter, namely Poulina group, has also already met with employees and executives of Agromed to assure them that it will not at this point implement any social plan, but will strengthen the staff of the company when the company gets back on feet and regain its strength. It is not known yet if the new buyer will keep the corporate identity of the company and its products. We are assured, however, that in the medium term, there would be a merger between Agromed and Selja, and the Poulina Company already produces milk (sale of 50 thousand liters daily) Yap, where it has 12% of market share and dairy products including yoghurts, where it declares a market share of around 8%.
Pending final agreement of the takeover (even if it has already been in force to ensure the sustainability of the company and pay the salaries of employees that will be done in time we are assured there) of Agromed all the legal formalities with the relevant authorities on the subject were completed. Poulina plans to bring Agromed back on its feet in less than 5 years, settle all its debts and make it a competing business in the sector. To achieve this goal, Poulina has financial capabilities, tools of good management, and technical experience in agribusiness and in milk, specifically. Poulina would by then, and without affecting the rights of creditors, increase the capital of the company and plans for this reason to reduce capital to zero and then refill the coffers of the company) and later repurchase the shares of remaining shareholders.
There is no doubt that the production of Agromed will also allow Selja or what would become the duo Selja-Agromed to increase their market share and also export (Poulina plans to have the authorization and create a platform for exports to Libya in particular, especially since it already sells its ice cream there) and become a serious competitor for Délice Danone.